Scenario: Pat and Joe are playing a game. The rules of the game are simple. Pat is given $100. He can either give it to Joe or keep it for himself. If he keeps it for himself, $50 will be taken back, and the remaining will be split between them. If he gives it to Joe, Joe can either divide it into two equal parts or keep it for himself. If he divides it into two equal parts, each of them will get $50. If he does not split the money, he will get the entire amount.
-Refer to the scenario above.This is similar to ________.

Question

Quizplus · Accepted Answer

The best choice is for Pat to give the $100 to Joe and trust that he will split it equally. This is a trust game, and by giving the money to Joe, Pat is showing trust in him. If Joe reciprocates by splitting the money equally, both players will come out with $50 each. However, if Pat keeps the money for himself, he will only end up with $50 after the deduction, and if Joe keeps the money for himself, Pat will end up with nothing. Therefore, giving the money to Joe is the best choice in this scenario.

Scenario: Pat and Joe Are Playing a Game